I.Factual Background and Summary of Petitioners’ Statements
1.Facts of the Original Case
Petitioner 1 was, at the time, serving as the Senior Vice President and General Counsel of the Legal Affairs Department of China Development Financial Holding Corporation (hereinafter referred to as “CDFHC”); Petitioner 2 was, at the time, serving as the Senior Manager of the Strategic Planning Department of CDFHC. The Petitioners participated in the plans for the merger of CDFHC with Taiwan International Securities Co., Ltd., intending to acquire more than 20 percent of the issued shares of Global Securities Finance Corporation. Such actions were alleged to have violated Article 175 (hereinafter referred to as “Disputed Provision 1”), Article 43-1, Paragraph 3 (hereinafter referred to as “Disputed Provision 2”), Article 43-1, Paragraph 4, Second Sentence (hereinafter referred to as “Disputed Provision 3”) of the Securities and Exchange Act, as amended and promulgated on February 6, 2002, as well as Article 11, Paragraph 1 (hereinafter referred to as “Disputed Provision 4”) of the Regulations Governing Public Tender Offers for Securities of Public Companies (hereinafter referred to as the “Regulations Governing Public Tender Offers”). The Taiwan High Court, in its Criminal Judgment of 99-Chin-Chung-Shang-Su-61 (2010) (hereinafter referred to as the “Final and Binding Judgment”), found the Petitioners in violation of the aforementioned provisions and imposed criminal penalties. Following an appeal by the Prosecutor, the Criminal Judgment of 104-Tai-Shang-720 (2015) of the Supreme Court dismissed the appeal on the grounds of procedural irregularity, thereby rendering the Judgement final and binding. Petitioners 1 and 2 contended that the application of Disputed Provisions 1 to 4 in the Final and Binding Judgment raises constitutional questions and therefore petitioned for a constitutional interpretation.
2.Summary of Petitioners’ Statements
The summary of Petitioners 1 and 2’s contentions is as follows: (1) The phrases of “intends to acquire” and “intends to acquire within 50 days” in Disputed Provisions 1 to 4 violate the principle of clarity and definiteness of criminal punishment. (2) Disputed Provisions 1 to 3 constitute special criminal law, wherein the constituent elements of “certain percentage” and “certain conditions” are delegated to the Competent Authority to prescribe, thus violating the principle of clarity in delegation of regulatory power.
3. Relevant Legal Provisions and Historical Development
Disputed Provision 1 applied in the Final and Binding Judgment refers to Article 175 of the Securities and Exchange Act, as amended and promulgated on February 6, 2002, which stipulates: “A person who violates ... Article 43-1 ... Paragraph 3 ... shall be punished with imprisonment for not more than two years, detention, and/or a fine of not more than NT$1.8 million.” When this Article was subsequently amended and promulgated on January 4, 2012, Paragraphs 2 and 3 were added, and Disputed Provision 1 was moved to Paragraph 1 of the same Article, with no changes to its content.
Disputed Provision 2 applied in the Final and Binding Judgment refers to Article 43-1, Paragraph 3 of the Securities and Exchange Act, as amended and promulgated on February 6, 2002, which stipulates: “Any person who independently or jointly with another person(s) proposes to acquire a certain percentage of the total issued shares of a public company shall make the acquisition by means of a public tender offer, unless certain conditions are satisfied.” Subsequently, the provision was amended and promulgated on July 1, 2015, December 7, 2016, and on April 17, 2019, respectively, with only minor textual modifications that added no changes to the legislative intent of this paragraph.
Disputed Provision 3 applied in the Final and Binding Judgment refers to Article 43-1, Paragraph 4, Second Sentence of the Securities and Exchange Act, as amended and promulgated on February 6, 2002, which stipulates: “... [T]he ‘certain percentage’ and ‘conditions’ under the preceding paragraph shall be prescribed by the Competent Authority.” Subsequently, when amended and promulgated on July 1, 2015, it was revised to read as the following: “... [T]the ‘certain percentage’ and ‘conditions’ in connection with the acquisition of a certain percentage of the total issued shares of a public company under the preceding paragraph shall be prescribed by the Competent Authority.” It was further amended and promulgated on December 7, 2016 and on April 17, 2019, with only minor textual adjustments that did not alter its legislative intent.
Disputed Provision 4 applied in the Final and Binding Judgment is the current Article 11, Paragraph 1 of the Regulations Governing Public Tender Offers, which states: “Any person who individually or jointly with another person(s) intends to acquire within 50 days shares accounting for 20 percent or more of the total issued shares of a public company shall employ a public tender offer to do so.”
II.Basis for Acceptance and Review Procedures
1.Examination of Acceptance Requirements
Pursuant to Article 90, Paragraph 1 of the Constitutional Court Procedure Act (hereinafter referred to as the “Constitutional Procedure Act”): “Except otherwise provided in this Act, this Act applies to all the pending petitions before the Constitutional Court lodged before the coming into force of this Act. Notwithstanding, the admissibility of such petitions shall be decided in accordance with the Constitutional Interpretation Procedure Act, which this Act is to replace through wholesale revision.” Petitioners 1 and 2 filed their requests for a constitutional interpretation on February 9, 2021, which was found to meet the applicable requirements prescribed in Article 5, Paragraph 1, Subparagraph 2 of the Constitutional Interpretation Procedure Act (hereinafter referred to as the “Interpretation Procedure Act”) at the time, and thus the petition was accepted for review.
2.Oral Argument Procedures
The Court held an oral argument on February 7, 2023. Notifications were issued to the Petitioners, the competent authority (the Financial Supervisory Commission) and the relevant authority (the Ministry of Justice). Additionally, experts and scholars were invited to present their opinions. The key points of the oral arguments presented by the Petitioners, the competent authority, and the relevant authority are summarized as follows:
(1)Summary of the Statements made by Petitioners 1 and 2: i. There is no consensus on the definition of economic criminal law. The legislative body often adopt statutory offenses and blank criminal law in its legislative approaches. Disputed Provision 1 is a criminal penalty in nature and should comply with the constitutional principle of nulla poena sine lege and the principle of clarity and definiteness of criminal punishment. ii. As for whether Disputed Provisions 1 to 3 conform to the principle of clarity and definiteness of criminal punishment, it should be determined based on the parent law, rather than on a combined assessment of the parent law and its delegated regulations. iii. In enacting Disputed Provisions 2 and 3, the legislative body failed to specify either the purpose of delegating authorization or the factors and standards that the competent authority must follow when establishing regulations. Moreover, the requirement of “intend[ing] to acquire within 50 days” in Disputed Provision 4 is subject to multiple interpretations, rendering its definition unclear, which resulted in inconsistencies between the competent authority’s directives issued in 2005 and 2007. Consequently, Disputed Provisions 1 to 4 violate the principle of clarity in delegation of regulatory power and the principle of clarity and definiteness of criminal punishment.
(2)Summary of the Statement made by the Competent Authority: i. Economic criminal law possesses unique characteristics requiring highly specialized judgment. The legislative body’s adoption of blank criminal law as a legislative approach serves to respond to the rapid changes in financial market operations and prevent evasive behaviors that circumvent the law. ii. Although Disputed Provision 1 is a penal provision, since those subject to economic criminal law are predominantly business enterprises engaged in economic activities with relatively higher financial resources and better knowledges, the standards for reviewing the principle of clarity and definiteness of criminal punishment should be more lenient. iii. The purpose of Disputed Provision 2 is to prevent stock price volatility caused by anonymous, irregular large-scale stock acquisitions. When examining Disputed Provisions 3 and 4 together with the relevant provisions of the Securities and Exchange Act and Regulations Governing Public Tender Offers, it can be determined that Disputed Provision 4 defines the “certain percentage” as “20 percent or more,” which aligns with the threshold for defining significant influence as used in accounting practices. As for the requirement of “within 50 days” set forth in Disputed Provision 4, it is based on the maximum duration of 50 days for public tender offers (as per Article 18 of the Regulations Governing Public Tender Offers). Therefore, Disputed Provisions 1 to 4 comply with the principle of clarity delegation of regulatory power and the principle of clarity and definiteness of criminal punishment.
(3)Summary of the Statement by the relevant authorities: i. Economic criminal law serves dual purposes, that is, safeguarding the stability and fairness of economic order while enabling potential regulated persons to foresee the culpability of their conduct. It aims to achieve both regulatory flexibility and clarity of constituent elements. However, under the principle of nulla poena sine lege, economic criminal law, like general criminal law, should comply with the principles of clarity in delegation of regulatory power and clarity of constituent elements. ii. The regulated parties under Disputed Provision 2 are those “propose to acquire a certain percentage of the total issued shares of a public company.” As they are engaging in activities within this risky domain, they should bear a certain degree of duty of care with respect to compliance with the laws. The legislative body has specified in Disputed Provision 2 the purpose of maintaining stock price stability, and the competent authority has determined that “20 percent or more” is the threshold requiring mandatory public tender offers, as it may affect the market price of individual stocks. iii. Disputed Provisions 1 to 4 enable the regulated parties in general to foresee the culpability of their conduct, and these can be determined and assessed through judicial review. As a result, these Provisions do not violate the principle of clarity in delegation of regulatory power and the principle of clarity and definiteness of criminal punishment.
III. Legal Grounds for the Holdings
1.Constitutional Principles and Standards for Review
(1)The Principle of Clarity and Definiteness of Criminal Punishment
Penal regulations involve restriction or deprivation of people’s fundamental rights to life, personal liberty and property rights. The exercise of the state’s power to impose criminal punishment must strictly adhere to the constitutional principle of nulla poena sine lege. Punishment for a conduct shall be limited to what is expressly prescribed by law at the time of the act. Furthermore, the constituent elements of crimes as defined by law must be, with sufficient predictability to satisfy the requirement of legal clarity, comprehensible to regulated parties in general (see J.Y. Interpretations Nos. 602 and 792). However, the requirement of legal clarity does not mandate that wordings of the provisions must be exhaustively detailed as to leave no room or need for further interpretation. When making laws, the legislators may consider factors such as the complexity of relevant social circumstances, the needs of regulatory framework construction, and the appropriateness of application to specific cases when selecting suitable legal concepts and terminology. If the meaning of such legal concepts and terminology chosen by the legislators is not difficult to comprehend in terms of their text, legislative purpose, and systematic connection with the legal framework as a whole, and if the ordinary regulated parties can foresee whether the specific facts fall within the scope of regulation intended by the law, and if such determination can be reviewed and adjudicated by courts, then there is no violation of the principle of legal clarity (see J.Y. Interpretations Nos. 432, 521, 594, 602, 690, 794, 799, 803 and 804 for reference).
Furthermore, regarding whether the constituent elements of crimes prescribed by penal regulations are sufficiently clear, in terms of “foreseeability by the ordinary regulated parties,” if the legislative body have considered the complexity of social circumstances in response to regulatory needs of different professional fields when they draft the law and if the scope of conduct intended to be regulated by the legislative body is sufficiently limited from the perspectives of legislative purpose and systematic connection with the legal framework, then “the ordinary regulated parties” should be understood as referring to the “persons generally subject to such limited scope of regulation,” rather than persons with ordinary intelligence. Moreover, the method of determining “foreseeability” is closely related to the legislative technique adopted by the legislative body. When adopting the legislative technique of blank constituent elements, which directs the constituent elements of crimes to laws or orders enacted by the same or different regulatory authorities through external or internal guidances, the determination of “foreseeability” must be made by examining the penal regulations together with the relevant provisions that supplement the constituent elements of crimes as a whole.
(2)The Principle of Clarity in Delegation of Regulatory Power
While the Constitution permits the legislative body to delegate regulatory power to administrative agencies to promulgate regulations as supplements to laws through the adoption of authorization provisions, the purpose, content, and scope of such authorization must be concrete and clear. The degree of clarity required for authorization provisions should be proportionate to the impact that the authorized regulations have on people’s rights. As penal regulations substantially affect people’s rights to life, liberty, and property, they must be prescribed by statute in accordance with the principle of nulla poena sine lege. When a law authorizes the competent authority to promulgate supplementary regulations, the culpability of conduct must be foreseeable from the authorizing law itself in order for such authorization to be clear (see J.Y. Interpretation No. 522 for reference). If, based on the overall observation of the parent law under which the authorization is granted, it is sufficient for individuals to foresee the possibility of punishment for their conducts and this consequently fulfills the requirement of foreseeable culpability. Absolute certainty of the culpability on an individual’s action is therefore not required (see J.Y. Interpretation No. 680 for reference). Furthermore, whether the authorization is clear should not be confined to the literal text of the authorization provision itself but should be determined through the interpretation of the law as a whole or based on the related meaning expressed by its overall provisions (see J.Y. Interpretation No. 643 for reference).
2.The Court’s Decision
(1)The Disputed Provisions 1 to 4, being penal provisions in Economic Criminal Law, must comply with the Constitutional Principle of Nulla Poena Sine Lege
Since the advent of economic activities, there have been criminal offenses within the scope of economic criminal law. With the state’s increasing attention on economic activities and strengthening of preventive measures, there has been a rise in criminal sanctions for violations of economic regulations. The types of economic criminal offenses are indeed diverse. The Securities and Exchange Act, to which Disputed Provisions 1 to 3 are part of, represents the state’s regulatory framework for capital market economic activities, and the penal provisions passed by the legislative body therein fall within the scope of economic criminal law. The term “economic criminal law” is not a statutory term in our country and carries different meanings according to varying definitions in criminology, criminal policy, and criminal law hermeneutics. Nevertheless, in terms of the purpose and function of criminal sanctions, economic criminal law is not fundamentally different from criminal law, thus making it difficult to draw an absolute distinction between the two.
Article 11 of the Criminal Code provides: “The General Provisions of this Code shall also apply to other laws and to rehabilitative measures that provide criminal punishment and confiscation unless the punishment is otherwise prescribed in these laws and measures.” Given that the legislative body has adopted Disputed Provisions 1 to 3 in the Securities and Exchange Act, and Disputed Provision 3 authorizes the competent authority to prescribe Disputed Provision 4, when viewed as a whole, the Disputed Provisions 1 to 4 constitute criminal law provisions in the realm of economic criminal law and must therefore comply with the constitutional principle of nulla poena sine lege and its derived principle of clarity and definiteness of criminal punishment.
(2)Disputed Provisions 1 to 4 do not violate the Principle of Clarity and Definiteness of Criminal Punishment
The legislative body has employed the legislative technique of blank constituent elements in Disputed Provisions 1 to 3. First of all, Disputed Provision 1 was stipulated under the Securities and Exchange Act, then directing the constituent elements of the crime through internal guidance to Disputed Provision 2, which explicitly prescribes the types of conducts, the categories of penalties, and statutory range of punishments for violating public tender offer rules.
Judging from the literal wording of the term “any person” used by the legislative body to describe the subject of conduct in Disputed Provision 2, it is evident that, after an examination on the legislative intent and nature of the conduct specified in Disputed Provision 2, the legislative body aimed to prevent bulk purchases of securities that could impact the price of individual stocks (see Legislative Yuan 4th Term, 6th Session, 5th Meeting Document, p. 522) resulting in market volatility. Therefore, in the capital market, those capable of bulk share purchases generally refer to corporate managers, relevant practitioners, or persons intending to engage in bulk share purchases with such capability (hereinafter referred to as the “bulk share purchasers”; as evidenced by the “Public Tender Offer Statistics” attached as Appendix 1 to the Financial Supervisory Commission Letter Jin-Guan-Zheng-Jiao-1110151161 of January 6, 2023 to this Court, those who have violated this provision or conducted public tender offers pursuant to this provision since its implementation have mostly been bulk share purchasers). Their professional knowledge and expertise regarding public tender offers in the capital market are generally superior to those of persons of ordinary intelligence. Thus, with regard to Disputed Provisions 1 to 4, the “ordinary regulated parties” as referred to in the principle of clarity and definiteness of criminal punishment should mean the “bulk share purchasers,” and the review standard should be based on the understanding and comprehension of such individuals.
Furthermore, regarding the content of “certain percentage” mentioned in Disputed Provision 2, the legislative body adopted an external guidance approach, authorizing the competent authority via Disputed Provision 3 to prescribe Disputed Provision 4. To ensure a full and complete assessment of “foreseeability,” Disputed Provisions 1 to 4 should be examined collectively and observed as a whole (see J.Y. Interpretation No. 680 for reference). Based on the integrated and overall observation, for individuals engaging in bulk share purchasers, the interpretation of “intend[ing] to acquire within 50 days” in Disputed Provision 4, being a subordinate regulation, must align with the meaning of “propose to acquire” stipulated in its parent law (Disputed Provision 2). The term “propose to” as used in “Any person who independently or jointly with another person(s) ‘proposes to acquire’...” in Disputed Provision 2 inherently implies “prior agreement” in its literal meaning. Moreover, if an acquirer intends to obtain a portion of shares of the target company, such acquirer will definitely engage in prior consultation. As a result, the “proposes to acquire” referred to in Disputed Provision 2 can be understood through textual and purposive interpretation as “agreeing in advance to acquire” the target company’s shares, and “intend[ing] to acquire within 50 days” should be readily understood as “intending to acquire by mutual agreement within 50 days.”
With an overall consideration of Disputed Provisions 2 to 4, the determination of whether the term “certain percentage” refers to having significant influence over the target company or an actual control of the target company should be made based on national conditions and actual trading circumstances by the competent authority with its discretionary power. The competent authority, relying on its professional judgment and referencing the Statement of Financial Accounting Standards No. 5, The Accounting Standards for Long-term Equity Investments under the Equity Method Point 6, which states that “an investor holding 20 percent or more of the voting shares of an investee company is generally deemed to have significant influence over the investee’s operations, financial management, and dividend policies,” has set the “certain percentage” at “20 percent or more.” This indicates that, when the circumstance of a significant influence is achieved, public tender offers are required. This remains within the inherent power of the competent authority. Therefore, for bulk share purchasers, given their own or their professional teams’ expertise in the securities trading market, they will invariably conduct detailed planning before acquisition. With their level of comprehension, they should be able to foresee that the “certain percentage” mentioned in Disputed Provisions 2 and 3 include “20 percent or more.”
The competent authority responded to the inquiries from Attorney Chao (non-party) through the Financial Supervisory Commission Letter Jin-Guan-Zheng-San-0940149117 of November 10, 2005 (hereinafter referred to as the “2005 Letter”), stating that “ ... at any given point of calculation, if there is no intention to acquire, either alone or jointly with others, 20 percent or more of the total issued shares of a public company within 50 days, then the restrictions under Article 43-1, Paragraph 3 of the Securities and Exchange Act and Article 11 of the Regulations Governing Public Tender Offers shall not apply.” The competent authority further issued another response to the Northern Mobile Team of the Ministry of Justice Investigation Bureau through the Financial Supervisory Commission Letter Jin-Guan-Zheng-San-0950158842 of January 12, 2007 (hereinafter referred to as the “2007 Letter”), stating that “ ... if an acquirer intends to acquire a large number of shares within a short period, they must proceed through public tender offers to protect all shareholders’ equal right to sell and avoid affecting individual stock market trading. The mandatory public tender offer regulations apply regardless of whether the acquisition process involves direct purchase or by agreement followed by closing .... If a purchaser agrees through contract with the target company’s shareholders within 50 days to purchase more than 20 percent of the company’s shares, specifying the purchase price and number of shares, and the seller agrees to exercise shareholder rights or enjoy rights as director or supervisor as instructed by the purchaser from the contract date until the transfer of ownership is completed, even if the closing occurs after 50 days, this suggests an intention to acquire a large number of shares within a short period, and the purchaser should proceed through public tender offers according to the aforementioned mandatory regulations ....” Petitioners 1 and 2 argued that discrepancies existed between these Letters and claimed that Disputed Provisions 1 to 4 lack clarity and definiteness of criminal punishment. However, it is noted by this Court that the 2005 Letter was addressed to a non-party attorney, rather than to either Petitioners 1 or 2. Furthermore, a detailed analysis of the 2005 Letter reveals that it did not exceed the literal meaning of Disputed Provision 2, making it difficult to establish any discrepancy between the 2005 and 2007 Letters. Moreover, the competent authority did not publish the content of the 2005 Letter as an interpretative regulation in the Government Gazette pursuant to Article 160, Paragraph 2 of the Administrative Procedure Act, thus the 2005 Letter cannot be considered binding on Petitioners 1 and 2. Consequently, their argument that Disputed Provisions 1 to 4 lack clarity and definiteness of criminal punishment is without merit.
In conclusion, upon viewing Disputed Provisions 1 to 4 in their totality, it is not difficult to comprehend when considered in terms of their text, legislative purpose, and systematic connection to the legal framework. Moreover, they are foreseeable to bulk share purchasers. Therefore, Disputed Provisions 1 to 4 do not violate the principle of clarity and definiteness of criminal punishment.
(3)Disputed Provision 3 does not violate the Principle of Clarity in Delegation of Regulatory Power
First of all, regarding whether the purpose, content, and scope of the authorization provided in Disputed Provision 3 are concrete and clear: Pursuant to Disputed Provision 2, the subjects and types of conduct requiring public tender offers are bulk share purchasers who alone or jointly with others intend to acquire a certain percentage of the total issued shares of a public company, and unless meeting certain conditions, must do so through public tender offers. Failure to do so results in criminal sanctions in accordance with Disputed Provision 1. Thus, the “certain percentage” constitutes part of the constituent elements for criminal punishment, while the “certain conditions” are exemptions from the public tender offer requirement.
The purpose outlined in Disputed Provision 2 is to prevent the impact of bulk securities purchases on individual stock prices (see Legislative Yuan 4th Term, 6th Session, 5th Meeting Document, p. 522). Disputed Provision 3 states that “.... the certain percentage and conditions mentioned in the preceding paragraph shall be prescribed by the competent authority” to enable immediate adjustment of regulatory measures in response to rapid changes in the securities market (see Legislative Yuan 4th Term, 6th Session, 5th Meeting Document, pp. 518-519). The competent authority for the securities market possesses the most detailed knowledges over the level of acquisition that could affect individual stock prices. Given the complexity, professional nature, and rapid fluctuations of the securities market, flexibilities are required so that the competent authority is able to make adjustments. The purpose of authorization is to allow the professional competent authority to have the flexibilities to adjust acquisition thresholds based on the securities market activities. The terms “certain percentage” and “certain conditions” as mentioned in Disputed Provision 3, when interpreted in relation to the overall provisions of the context of the authorizing law, indicate that the competent authority is authorized to establish both regulatory thresholds and exemptions for public tender offers. Accordingly, the purpose, content, and scope of authorization are sufficiently concrete and clear.
Secondly, with the observation of the parent law under which the authorization was granted as a whole, the question is whether it sufficiently enables people to foresee the possibility of their actions being subject to punishment. From the Disputed Provisions 1 and 2 of the relevant parent law, it is readily apparent that the legislative authorization already specifies the content and scope to establish a substantial acquisition threshold for mandatory public tender offers. If one intends to acquire the issued shares of a public company with a total value reaching this threshold, such acquisition must be conducted through a public tender offer. Failure to do so may result in potential risk of criminal penalties. Therefore, based on the overall observation of the parent law giving the authorization, it sufficiently allows people to foresee the possibility of their actions being subject to punishment, making the authorization clear enough to pass the constitutional scrutiny.
In conclusion, the purpose, content, and scope of authorization in Disputed Provision 3 are sufficiently concrete and clear, as well as enable people to foresee the possibility of punishment. Consequently, Disputed Provision 3 does not violate the principle of clarity in delegation of regulatory power.
IV.Conclusion
1.Disputed Provisions 1 to 4, which impose criminal penalties on those who violate public tender offer requirements, do not violate the principle of clarity and definiteness of criminal punishment.
2.Disputed Provision 3 does not violate the principle of clarity in delegation of regulatory power.
Notes:
Note 1: Prior to November 10, 2005, Attorney Chao (a non-party) inquired of the competent authority: “... Suppose investors jointly intended to acquire 36 percent of the shares in a public company, may they deliberately plan to circumvent the mandatory public tender offer regulations by dividing the acquisition into two transfers of 18 percent each, separated by 50 days? In other words, if investors intentionally circumvent the 50-day period requirement, would this still violate Article 43-1, Paragraph 3 of the Securities and Exchange Act? .... Since the statutory text only mentions ‘intending to acquire,’ it remains unclear whether investors must ‘actually acquire’ 20 percent or more shares within 20 days to violate this provision. If the violation of Article 43-1, Paragraph 3 only requires the intention to acquire 20 percent or more of the total issued shares of a public company within 50 days, without requiring actual acquisition, then the decision or agreement to ‘intend to acquire’ shares would already constitute a crime. Conversely, if it requires ‘actual acquisition’ of 20 percent or more shares within 50 days, which seems more consistent with how the law is applied in the fields of administrative law and criminal law, then even if a person initially intended to acquire 20 percent or more shares within 50 days but subsequently failed to actually acquire such shares within 50 days, since the Act does not punish attempted violations, there would be no risk of violating this provision ....”
Note 2: On December 8, 2006, the Northern Mobile Team of the Investigation Bureau inquired to the competent authority: “... What is the meaning of ‘intending to acquire’ ... If a purchaser enters into contracts with shareholders of the target company within 50 days to agree to purchase more than 20 percent of the company’s shares, specifying the purchase price and number of shares in the contract, and from the contract date until the transfer of ownership is completed, the seller agrees to exercise shareholder rights or enjoy rights as director or supervisor as instructed by the purchaser, would the aforementioned provision apply even if the actual closing date of the shares is scheduled 50 days later ....”